S.N. Broadberry, University of Warwick

This paper provides a quantitative reconciliation between recent estimates of comparative labour productivity levels in manufacturing and the aggregate economy estimates from the Maddison data set. The sectoral patterns suggest mechanisms of catching-up and forging ahead that are rather different from those found in the conventional literature. Both Germany and the United States caught up with and overtook Britain in terms of aggregate labour productivity largely by shifting resources out of agriculture and improving their relative productivity position in services rather than by improving their position in manufacturing. The key role attributed by many economic historians and growth economists to developments within manufacturing as a major factor driving convergence or divergence of productivity and living standards needs to be seriously qualified and attention needs to be shifted urgently to developments within services.